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House Co-Sponsorship Memoranda
House of Representatives
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | May 15, 2024 04:23 PM |
|---|---|
| From: | Representative Jennifer O'Mara and Rep. Morgan Cephas |
| To: | All House members |
| Subject: | Student Debt Tax Relief |
| Current and former college students in the U.S. have taken out approximately $1.75 trillion in student loans. Pennsylvania is a state where borrowers struggle with student loans more than most. Our borrowers have an average of $39,375 in debt, making us the state with the third-highest average student loan debt. The cost of both public and private four-year colleges has tripled since 1980, even when accounting for inflation, contributing to the need for students to take out more loans. Due to these increasing costs, students are constantly evaluating their career and financial paths to include ways to make college more affordable. One option includes working for employers who offer tuition reimbursement as part of their compensation agreement. However, tuition reimbursement is considered taxable income in Pennsylvania, which cuts into this benefit. Another affordability avenue impacting borrowers is student loan forgiveness. Yet, for those who qualify under various federal programs, Pennsylvania law does not specifically exempt student loan forgiveness from the personal income tax. Currently, only administrative efforts have prevented student loan forgiveness from being subject to the personal income tax. As such, we plan to introduce legislation that would help students reduce their financial burden by exempting tuition reimbursement from the personal income tax, as well as codifying that student loan forgiveness is not taxable income. Please join us in making sure that Pennsylvania student borrowers who receive much-needed financial relief are not later handed a tax bill from the Commonwealth. |
Introduced as HB2476